The extend to which the value of the firm is affected by unanticipated changes in exchange rates is called

Question

Quizplus · Accepted Answer

Economic exposure refers to the extent to which the value of a firm is affected by unanticipated changes in exchange rates. This exposure arises from the impact of exchange rate fluctuations on a firm's future cash flows, which can affect its overall value. The other options, such as B) operating exposure, C) transaction exposure, and D) translation exposure, refer to more specific types of exchange rate risk that affect a firm's operations, cash flows, and financial statements, respectively.

The Extend to Which the Value of the Firm Is